Touting graphics is a foolish strategy? That and quality games are practically the only strategies consoles have. The ability to have fantastic graphics means that the system is powerful and will be able to play amazing games in the future. There's no downside to that.
I've got a few complaints here but I want to preface this by saying I do agree with several things you're saying. I especially like the recommendations towards the end of the article. But generally this is not graphics being broken, that's the improper use of graphics being broken. My complaints are all mainly with your article title and the first seven or so paragraphs. Just before you get into ludonarrative dissonance (something I consider to be lazy game mechanic brainstorming). Anyways, here I go:
Complaint 1
Saying, "The uncanny valley" isnt a reason to throw out the pursuit of crossing it. The point of it being a valley and not an asymptotic wall is that there's another side. It IS being crossed and this next step in advancement should be enough to get us more firmly on the other side. We've already been managing to produce truly beautiful human forms in the current generation and this will end with a much better platter for us. You can't look at games like L.A. Noire that convey realistic human facial expression and think, "Well, we'd better just give up because, well, Uncanny valley!" No, we started hitting the uncanny valley in much earlier consoles and have been working through that valley since then. Now we have the ability to develop realistic humans that are at least on the attractive side of the equation. We got darn close to crossing it in the current generation and honestly may have in some games. The more powerful machines will allow for better AI. Those wifes who didn't behave like wives? That's AI processing, not graphics and both are made better by this.
Complaint 2
As for production costs, those only increase if the production companies allow them to increase. Let me explain how budgeting is supposed to work in a major company:
1. How much can we anticipate to make in revenue (total money taken in) if we make this game? (this is called forecasting)
2. How much do we want to make in profit (revenue - expenses) out of the anticipated revenue?
3. Revenue - profit = expense (how much is spent in development, marketing and everything else that creates the games and gets it into the hands of the gamer).
4. Of the anticipated expense for the game, where to we allocate the money? (This is called budgeting)
5. Sticking to the budget.
Companies mess up either in 1 or 5, usually. There's room to mess up in any of them but 1 or 5 will end in those spectacular failures. If they anticipate making X in revenue and production of a Ultra High graphic game costs X+1. Then a bad company goes ahead with it (these are the companies that make an RPG and forecast their game as making COD money). A good company either says no or scales back the cost to produce a solid game that may not be ULTRA high quality.
Additionally, and this may have been missed, but developers have been struggling with fitting ever better graphics into archaic machines for a few years now. Skyrim pretty much scraped the bottom of the PS3's barrel thanks to its ridiculous asset categories getting bloated by the game's assets. Having a platform that can handle more graphics will allow them to loosen up and not have to SUPER fine tune certain assets. That cuts costs. The systems have gone to x86 environments and so are MUCH easier to develop for than this past generation. You're talking about even larger savings. Hypothetically, this move may have saved them a ton of money.
Also, we should expect to see engines being made that other developers will be able to utilize. Just like the Unreal Engines or Source. Engines can be a real driving source to technology that is built incrementally in such a way that sidesteps the cost of having to make lavish advances in technology every time a new title is being made.
So "costs" is a cop out. Anyone who spends more on something than they can make on it deserves to not succeed there. Hopefully someone else will pick up the IP and treat it right.
Complaint 3
Graphical quality doesn't just play into character realism. You get more vibrant and realistic environments. Water behaves more accurately and lighting is more realistic. I anticipate that we may see a sort of digital exploration market (like Myst or Zork) crop up again if something like the Occulus Rift catches on. Processing may be extremely necessary for this stuff. I strongly recommend looking into the kind of tech we're beginning to see, it's remarkable.
Pretty cool
Want to explore Pandora? Sure, why not? To render it in real time you need these advances.
Discussion
I believe this discussion (again, down to around paragraph 7 in the article) to be about something other than good graphics. I think there's a lot of disatisfaction with publishers failing to put the story first. That isn't graphics or technology's fault. That's the publisher's fault. These indie developers aren't showing that graphics can't enhance games. They're showing that even simplicity can be better than a graphically superior game that sucks as a story.
Small, simple games like Angry Birds also expanded the market in a way AAA games can't. Not because AAA games aren't as good, but because it's the difference of reading a novel vs. reading a magazine. One is a long term project while the other is something you can just jump into and out of at will. But that doesn't make the magazine articles any less engrossing. I just got done playing Thomas was Alone. Holy heck if it isn't simple but AMAZING.
When people argue about better graphics. It just seems to me like they're angry about there being a more capable platform even though it doesn't have anything to do with how developers use that. The ps4 and the xbone, those are machines whose sole purpose is to provide a blank canvas. This is just a bigger canvas allowing for more detail. You can still hand paint on it. It'll be the publisher's job to decide what works for them. At that point their decision will be on their shoulders, not the consoles'.
In any event, if graphics are Pandora's box, they've already been opened. Sticking at today's graphics aren't going to make bad publishers stop doing business the way they're doing it. This is a step in the right direction and it serves to benefit no one to stick around. I hope for a day where graphics can't get much better and everyone has a free game engine that allows them to make what they want and have it look as realistic or artistic as they want. On that day, good graphics won't sell a game because everyone can have good graphics, but only good stories will survive. That's the day we've arrived.